Well, if some old white separatists thought something a few hundred years ago, I guess I'm ridiculous for suggesting it might not be relevant any more.edit:I'm genuinely sorry for getting into this (any) discussion with you, again. We're both worse off for it - I am not familiar enough with the arguments to say anything you can't find anywhere else, and you have no interest in doing anything but spraying illogical rhetoric. Sorry for wasting everyone's time.

Dude, spraying illogical rhetoric with you and Wakefield is my favorite part of the day...But yea, this subject has runs its course, we'll call it a draw with me a slight favorite and move on to the next one.Plus these guys are ignoring our rhetoric for stats and facts and stupid stuff.

I use my cigar smoke as idiot repellent

“Journalism is printing what someone else does not want printed: everything else is public relations.” ― George Orwell

This home just sold for $1.18 Million in Toronto and will most likely be bulldozed and a new home put on the lot and it isn't even in one of the most expensive neighbourhoods.http://www.theglobea...article2362078/

I wonder how this could possibly turn out?If only there were something we could reference that was similar to this behavior...

No, I'm not. It's a hypothetical situation, designed to illustrate that just because a policy gives some people money, it's not necessarily a good policy. It's supposed to be obvious that this would be a bad policy. It's a bad policy for the same reasons that the mortgage tax deduction is a bad policy, only more extreme and obvious.

I really think you are ignoring all the other economic factors (and there are a ton of them) that are bolstered not only by active home ownership, but also an increasing property value. If we give a small tax deduction to help acheive that, I think it is a good thing. In addition, and which was my first point, just ending the mortgage tax deduction would cause and immediate -re-collapse of the housing market. Millions (more) of homes would go in foreclosure.

BaseJester, on Wednesday, April 25th, 2012, 9:56 PM, said:

Yeah, you're going to be upside down in that condition.I think it's interesting that you're portraying this as buying a house, but you're treating the actual principal payments as negligible.

I am not treating the principal payments as negligible, it wasn't a part of the discussion.

BaseJester, on Wednesday, April 25th, 2012, 9:56 PM, said:

I don't think I did. I think I said that it should benefit the country as a whole. As in, we're going to make this behavior tax-advantaged because we want more of it because it's good for the country.

I addressed this above.

BaseJester, on Wednesday, April 25th, 2012, 9:56 PM, said:

:-)The Midwest.You just made my case. This person gets a benefit of $3,100 multiplied by his marginal tax rate, say $1000? You're getting about 10 times as much benefit as this person. And this is the first year of a loan for an above-average home price.There seems to be a lot of variance in what people mean by flat tax, so I don't really know if I'm for a flat tax.My ideal tax policy would tax consumption and not income, because investment is a behavior that the United States has a compelling interest in. The mortgage interest deduction is the exact opposite of this ideal, because it causes people to pay less tax if they consume more.

Again, the benefit goes well beyond a tax deduction. More people at Home Depot, more people landscaping, remodeling, paying contractors, paying property tax, which pays for schools. IIRC your wife is a teacher, I would think you would see the benefit of higher home values so that there were the necessary funds going to pay for education.

And you say my view point is skewed. As of 2010 the average home price in the U.S. was 272,000.00. Above what I used for my example. Another thing about these decreased property values. You cannot build houses for what you can buy them for. Hell the permits and fees would be half the cost of some of those homes you listed. I recently looked into the cost of adding a 2nd home on my property. I would be in it over $30,000 before a shovel hit dirt. I just looked and in Indiana, the average per sqft cost to build a home is $86. Which puts all of the properties you listed about 25-30% below the raw construction cost.

My ideal tax policy would tax consumption and not income, because investment is a behavior that the United States has a compelling interest in. The mortgage interest deduction is the exact opposite of this ideal, because it causes people to pay less tax if they consume more.

What kind of investment? Isn't real estate traditionally one of the best long-term investments?I think you and Ocho are both making good arguments. It's an interesting discussion.

Something to keep in mind when most people are talking about reforming the tax system by eliminating a tax expediture like the home mortgage interest deduction they are talking about reducing the overall tax rates at the same time. Somebody like Ocho will lose his mortgage deduction but his overall tax rates will be lower.I think this discussion shows why it's hard to reform things because nobody likes having something taken away from them. There is no question the mortgage interest deduction favours higher income home owners at the expense of people who rent and everybody else but to remove it in one fell swoop would create a lot of adjustment problems like Ocho is talking about but that doesn't mean if it's bad policy to allow mortgage interest deduction (which I think it is for quite a few reasons) that it shouldn't be gradually removed over time so that the adjustment shocks are more gradual and can be planned for.

I am not treating the principal payments as negligible, it wasn't a part of the discussion.

You wrote:

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Are you delusional. Have you seen what has happened in the last 5 years? I bought a home for 450K, it went up to 700K, it's now worth less than 200K. In 1987 when it was originally built, it sold for 189K. I also remodeled and fixed it up. So unless I put 250K down on the house or more there is no chance I would have equity.

If you put $150k down and paid $150k of principle over the 5 years, your equity is $200k + $150k + $150k - $450k = $50k. Paying principle is a way to build equity, which you precluded in your example.

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And you say my view point is skewed. As of 2010 the average home price in the U.S. was 272,000.00. Above what I used for my example.

No, you're looking at the mean new home price.

If everybody is thinking the same thing, then somebody isn't thinking.- General George Patton

You wrote:If you put $150k down and paid $150k of principle over the 5 years, your equity is $200k + $150k + $150k - $450k = $50k. Paying principle is a way to build equity, which you precluded in your example.

You actually were making some meaningful progress, then you go back to this. Putting 150K down and paying 50K a year in principal?? Now you are talking about uber wealthy people. Hell even rich people can't do that.

BaseJester, on Thursday, April 26th, 2012, 6:56 PM, said:

No, you're looking at the mean new home price.

Are you trying to say there is a difference between the price of a new home and a used home? Cost per sqft is cost per sqft.

You actually were making some meaningful progress, then you go back to this. Putting 150K down and paying 50K a year in principal?? Now you are talking about uber wealthy people. Hell even rich people can't do that.

I'm not saying this particular example is typical.The example you posed was 5 years, not 1, so $10k per year in principle.And, yes, if you bought at the peak with a typical down payment and sold after a massive decrease in housing prices with a typical loan (or an interest-only loan like your example), you would have no equity.

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Are you trying to say there is a difference between the price of a new home and a used home?

Umm, yes?New homes cost more than used homes.

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Cost per sqft is cost per sqft.

That's the unit of measure, and new homes cost more per square foot than used homes.

If everybody is thinking the same thing, then somebody isn't thinking.- General George Patton

I'm not saying this particular example is typical.The example you posed was 5 years, not 1, so $10k per year in principle.And, yes, if you bought at the peak with a typical down payment and sold after a massive decrease in housing prices with a typical loan (or an interest-only loan like your example), you would have no equity. Umm, yes?New homes cost more than used homes.That's the unit of measure, and new homes cost more per square foot than used homes.

Upgraded homes cost more, not new homes. If I have a home built in 1980 right next to a home built in 2006 and they are the same size, same sqft, laminate counters, carpet, etc. They will be the same price. The only reason "new" homes cost more, is because of granite, high end appliances, etc.

Upgraded homes cost more, not new homes. If I have a home built in 1980 right next to a home built in 2006 and they are the same size, same sqft, laminate counters, carpet, etc. They will be the same price. The only reason "new" homes cost more, is because of granite, high end appliances, etc.

Existing homes are, on average, cheaper than new homes. This is a fact. The set of existing homes includes the upgraded and well-maintained ones like you describe and also shitty ones.The median existing home price in March 2012 was $163,600.The median new home price in March 2012 was $234,500.http://www.nahb.org/...x?sectionID=131Furthermore, you quoted a mean value, which you cannot use to support an assertion about typical at all. 60% of filers don't even itemize.

If everybody is thinking the same thing, then somebody isn't thinking.- General George Patton

You have to take sqft into account. New homes are typically larger. Until about 2-3 years ago the average size of a home was going up dramatically. So yes, older homes typically will sell for less if you don't take sqft into account.

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According to the National Association of Home Builders, the average home size in the United States was 2,700 square feet in 2009, up from 1,400 square feet in 1970Read more: U.S. Home Size — Infoplease.com http://www.infopleas...l#ixzz1tHYx98lo

On the contrary, it's completely irrelevant to this thread. The tax deduction is based on the interest on the mortgage, which is a function of the size of the mortgage. I shouldn't have followed this tangent.

If everybody is thinking the same thing, then somebody isn't thinking.- General George Patton

What kind of investment? Isn't real estate traditionally one of the best long-term investments?

If I buy a house and live in it, I'm consuming my personal wealth at the rate of the physical depreciation of the building and the real interest on the loan. Meanwhile, I might also be gaining or losing wealth based on speculation in the market. This is entirely different animal from investing money in a factory to produce widgets. The factory creates wealth that I'm not consuming.

If everybody is thinking the same thing, then somebody isn't thinking.- General George Patton

$600K doesn't get you much in a lot of places. Ocho is in California where even after the housing bust homes are a lot more expensive then the midwest.This home just sold for $1.18 Million in Toronto and will most likely be bulldozed and a new home put on the lot and it isn't even in one of the most expensive neighbourhoods.http://www.theglobea...article2362078/

With prices like that, im guessing this is not a racially diverse neighborhood.Unless of course there is an nba franchise nearby.